It might come as a surprise that 15% of Kenyans use their mobile phones to pay bills and 60% use them to make other payments. However, this is the exception and not the rule in the Middle East and North Africa. According to a special report, Financial inclusion: Reaching the unbanked published by international banking group Standard Charter, 2.5 billion adults living in developing countries have no access to typical financial services such as banking and savings accounts, ATMs, electronic transfers, mobile banking or debit and credit cards.

The report stresses that financial inclusion helps disadvantaged and low-income segments of society better cope with poverty, boosts economic growth by mobilizing savings and pulls companies into the formal sector, thereby increasing tax revenues and making workers eligible for retirement benefits among other things. In addition, access to affordable financial services and products enables micro-enterprises to tap into the funding necessary to set up businesses, and expand and even improve risk management. To compare how countries are doing in overcoming barriers, authors Madhur Jha, Samantha Amerasinghe and John Calverley devised a financial inclusion heatmap, which uses various parameters such as the distance to a bank, lack of financial infrastructure, restrictive regulations, governance failures and a lack of suitable products to rank a cross-section of 30 countries.

Not unexpectedly, developed economies scored best and less-developed countries ranked poorly. In the #1-ranked United States, for instance, 60% of adults have a credit and/or debit card and over 50% have savings accounts at a financial institution. In Egypt, which ranked lowest, less than 1% of the adult population had savings in a financial institution and only around 5% owned a debit or credit card.

Taking the heatmap as a whole, results would suggest that GDP per capita explained about 70% of the difference in financial inclusion across the selected countries. However, when carefully analyzing the bottom 50% of economies by income, the study found that GDP accounted for only 22% of the difference, suggesting that there are other factors at play such as poverty, a lack of education, cultural and religious beliefs or a lack of physical infrastructures.

Kenya’s mobile-money-system M-PESA is a prime example of how these limitations can be successfully overcome. Capitalizing on an already existing national identification system, the Kenyan Government further simplified bureaucracy by allowing “regulation to follow innovation.” The program was designed to meet the people where they are. Whereas Kenya does not have a good physical infrastructure, some 70% of the population owns a mobile phone. M-PESA has been tremendously successful. Introduced in, Kenya is now the world leader in mobile money services.

Financial inclusion has moved up the global reform agenda and become a topic of great interest for policy makers, regulators, researchers, market practitioners and other stakeholders So much so, that 96 developing countries, home to 75% of the world’s unbanked population, have become signatories of the Maya Declaration of Financial Inclusion. According to the World Bank, “The increased emphasis on financial inclusion reflects a growing realization of its potentially transformative power to accelerate development gains.”